Egypt in February 2023

2 February 2023

1. Egypt Proposes Initiative to Stop Current Escalation in Palestine (Middle East Monitor). According to the sources, Cairo conveyed the messages of the Palestinian Authority to the Israeli side, and Egypt called on Israel to stop the military escalation without any conditions.

3 February 2023

1. Exchange Rate Remains at 30 Egyptian Pounds to the Dollar (Egypt Independent) While the Central Bank Defies Expectations and Keeps Interest Rates Unchanged. (al Borsa News). The Monetary Policy Committee of the Central Bank decided not to raise the basic interest rates on the pound in its meeting on Thursday. The committee kept the rates of the return of deposits and lending for one night and the price of the main operation of the Central Bank at the level of 16.75%, 17.75% and 16.57%, respectively. The credit and discount rate was kept at 16.75%. The bank thus defied most of the expectations that indicated that it would raise interest between 1 and 3% today.

9 February 2023

1. Egyptian Government Will Sell its Shares in 29 Companies and 3 Banks Within a Year (Al Quds Al Arabi).  Mostafa Madbouly, the Egyptian Prime Minister, announced that the government will start offering its shares in 32 companies and banks over the course of a full year, starting from the current quarter until the end of the first quarter of 2024, whether to the stock exchange or to the strategic investor…Offering shares in state-owned companies on the stock exchange and selling land to investors comes within the framework of a plan previously announced by the prime minister, aimed at making state-owned assets worth $40 billion available for partnership with the Egyptian or foreign private sector for a period of 4 years.
2. Moody’s Downgrades Egypt’s Credit Rating…and Inflation is Expected to Accelerate (Aljazeera). On Tuesday, Moody’s downgraded Egypt’s sovereign rating by one notch to “B3” (B3) from “B2” (B2), pointing to a decline in its foreign exchange reserves and a decrease in its ability to absorb external shocks…Moody’s said that the strategy to sell state-owned assets, announced by the government, and that begins this month within the new International Monetary Fund program, will support the generation of sustainable non-debt-related capital flows to meet the increasing external debt service payments, but indicated that these measures will take “time to reduce the risks.”

10 February 2023

1. Sisi:  Egypt Needs $100 Billion in Investments over 7 Years (The New Arab). During his inspection tour of the army’s “Silo Foods” factory,  Egyptian President Abdel Fattah El-Sisi said, “When you have a gap of $30 billion annually, we still have to provide investments of no less than $100 billion, and this needs 5 to 7 years. The state cannot do that without the help of the private sector, so we are working to encourage investors.”
2. Egypt is Holding Talks to Prevent Escalation Between Israel and the Palestinians During Ramadan (The New Arab). Officials said that Egypt has intensified mediation efforts between Israel and the Palestinians in an attempt to stop violence in Jerusalem and the West Bank and prevent its spread to the Gaza Strip before the start of the holy month of Ramadan. Cairo this week hosted leaders from Hamas and Islamic Jihad, according to the officials. They said that talks were held with representatives of Israel earlier. Two Egyptian officials, who spoke on condition of anonymity, said Cairo believes the situation could spiral out of control, particularly given Palestinian sensitivities about Israeli restrictions on access to Jerusalem during Ramadan, which begins in late March.

14 February 2023

 Russia Seeks to Expand Its Military Presence in Sudan

Russia and the western powers competed for influence in Khartoum last week. In just a couple of days, Russian foreign minister Sergei Lavrov, a diplomatic delegation from the U.S. and EU, and an Israeli delegation all visited Sudan’s capital in a bid to strengthen relations there. The U.S.-EU delegation reportedly aimed to advance Sudan’s stalled political process toward a transition back to civilian rule from the military council that now runs affairs in Khartoum.  The delegation came soon after a visit by Israeli foreign minister Eli Cohen, who visited Sudan seeking to make progress toward an Israeli-Sudanese peace treaty later this year.

But last Wednesday, Lavrov made a different and counterbalancing visit when he met with Sudan’s military leadership to reach an agreement for a new Russian naval base on Sudan’s Red Sea coast.  In a press conference, Lavrov said he and Sudan’s military leadership had agreed that their two countries would work together to”reform the UN security council” and to achieve a “multipolar world” in which the power of the U.S. and the west would presumably be diluted. In truth, Moscow has cultivated a closer relationship with Sudan in recent years as a way to help escape international sanctions and isolation, the pressure of which has greatly deepened since Russia’s February 2022 invasion of Ukraine. Moscow needs all the friends it can get, and Vladimir Putin and his regime appear to view Khartoum’s ruling junta as a prime target for gaining new leverage at the same time that Israel, the U.S., and the European powers are aiming to upgrade their Sudanese relations.

15 February 2023

1. Price of the Dollar Breaches New Levels Against the Pound at Egyptian Central Bank (Al Hadath). The exchange rate of the dollar breached new levels against the Egyptian pound in the official market, at the end of Tuesday’s trading. Since the largest and last reduction announced by the Central Bank of Egypt in the price of the pound against the dollar in early January, the US green note has witnessed slight but continuous increases. On the other hand, the black market is suffering from a suffocating crisis, with a large number of speculators stopping and importers heading to banks to obtain dollars.

21 February 2023

 Tunisia’s Leader Carries Out an Authoritarian Crackdown, Threatening Democratic Rule Where the Arab Spring Began 

Security agencies loyal to Tunisian leader Qais Said have carried out a growing number of arrests of opposition politicians, activists, and journalists over the past month, raising longstanding fears that Said is intent on reestablishing authoritarian rule in the country.  The month of arrests is the latest in a string of red flags concerning Said’s plans. The story began in July of 2021 when Said staged a coup against the government institutions and began to rule unopposed. He dismissed the elected parliament, sacked the government, and ruled the country by decree after appointing a new cabinet of his own choice. He then brushed aside the 2014 constitution and authored his own, changing the country’s parliamentary system to a presidential one granting himself more power than any Tunisian president in history since its independence from France. See Video: (Tunisia’s slide to the one-man rule: Who is Kais Saied?)

After two rounds of the parliamentary elections had a turnout of only 11.4 percent in January, seeming to indicate that the electorate disapproved of Said’s entire system, Said launched a sweeping arrest campaign against prominent members of his opposition along with dismissals of a number of his own appointees. 

A former MP was sentenced to seven months in prison for his role in a high-profile case in which a Tunisian woman was prevented from traveling because her name was put on a no-fly list. Another prominent businessman and lawyer who had remained close to the late president Zine El Abidine Ben Ali was arrested without any public explanation.   

Said has been able to continue normal interaction with the international community as he conducts his arrest campaign and consolidates control in Tunis. On February 8, Said imposed a new foreign exchange law to “modernize the exchange system.” The next day, the World Bank announced approving a $120 million loan to Tunisia on the grounds that the loan would empower small and medium-sized businesses. 

He has also moved to change some of Tunisia’s foreign policy stances. Three days after the Turkiye-Syria earthquake, Said announced his intention to develop diplomatic relations with Syria’s Assad. Cooperating with Assad may serve Said’s domestic political purposes, as the prosecutor in the case against two of Said’s major opponents, Rashid Ganoushi and his Deputy Ali Al-Areedh, said he had received evidence that the two men’s Nahada Movement had helped send Jihadi terrorists to Syria in 2013. 

By February 13, Said’s security agencies had arrested twenty politicians for conspiring against state security. Although local, American, and European officials condemned Said’s actions, he responded by defiantly warning the United States to respect Tunisian sovereignty and expelling Esther Lynch, Secretary-General of the European Union of Trade Unions. After thousands of Tunisian Labor Union members protested in several cities, Said’s security agencies arrested the president of the Syndicate of Journalists as well. 

On February 15, Tunisian security forces arrested Noureddine Al-Buhairi, the deputy head of the Ennahda Movement and former Minister of Justice, removing him from his home to an unknown location, without announcing the reasons for his arrest. The next day, the former Chief of Staff for Rashid Al Ganoushi, Fawzi Kammoun, was arrested on suspicion of assaulting state security and planning a coup against Said. On February 21, Fadel Abdel Kafi, the head of the Afek Tounes Party, was arrested by the anti-crime squad of the National Guard. 

As for the president of the Ennahda Movement, Rashid Ghannouchi, and the speaker of the dissolved parliament, he appeared before the combating terrorism court this week after several other interrogations throughout this last year. The case dates back to February 2022, when Ghannouchi described the security forces as tyrants.

Said’s stunning arrest campaign comes just months after former and first democratically elected Tunisian President Dr. Moncef Marzouki warned the United States during a visit in November 2022 that Tunisia’s democratic system was in danger.

23 February 2023

1. US Dollar Records New Highs Against the Egyptian Pound (Al Hadath). The highest dollar exchange rate at Abu Dhabi Islamic Bank came at 30.63 pounds for purchase, compared to 30.68 pounds for sale. With 24 banks led by the Central Bank of Egypt, the exchange rate of the US green note stabilized at 30.58 pounds for purchase, compared to 30.68 pounds for sale.

27 February 2023

1. Egyptian Foreign Minister Visits Syria and Turkey for the First Time in a Decade (Al Quds Al Arabi). Egyptian Foreign Minister Sameh Shoukry will visit Syria and Turkey for the first time in a decade on Monday, after a cooling of relations between Cairo and both countries, according to an Egyptian Foreign Ministry statement on Sunday. The statement quoted Foreign Ministry spokesman Ahmed Abu Zeid as saying that Shoukry will visit the two countries with the aim of “conveying a message of solidarity from Egypt with the two countries and their two brotherly peoples, following the disaster of the earthquake on the sixth of February.” 
2. Egypt Once Again Borrowing from International Markets (The New Arab). The Egyptian government intends to offer more bond issues in the global markets this year, in an effort to obtain new loans while diversifying financing sources. Finance Minister Mohamed Maait did not rule out that other sovereign Islamic bonds will be offered this year, after offering Islamic bonds on the London Stock Exchange last week as part of a $5 billion program. An official at the Egyptian Ministry of Finance also said Egypt intends to borrow through Panda bonds in Chinese yuan at the beginning of the new fiscal year 2023/2024.
3. First of Its Kind:  Egyptian Prime Minister to Visit Qatar to Discuss Ways to Enhance Cooperation (Al Masry Al Youm). The Qatari capital, Doha, is witnessing this week the work of the Egyptian-Qatari committee between the two countries, in the presence of the prime ministers of Egypt and Qatar, representatives of the governments of the two countries, and a number of representatives of the private sector. The committee is discussing the signing of a number of memorandums of understanding between the Egyptian and Qatari sides and increasing investments between the Egyptian and Qatari sides to enhance the volume of trade exchange.

28 February 2023

1. Fourth Devaluation of the Egyptian Pound is Approaching (The New Arab). The Central Bank of Egypt is close to a new devaluation of the pound within the next two weeks, in a fourth wave of floating the local currency within one year. [The pound] may quickly drop to 35 pounds against the dollar, according to expectations in economic circles and international banks. 
2. Egyptian Central Bank Sells Treasury Bills Worth 60 Billion Pounds after Raising Interest Rate to 22.45%. (Al Masry Al Youm). The Central Bank of Egypt sold short-term treasury bills, with a total value of EGP 60.214 billion for the first and second offerings, on behalf of the Ministry of Finance. The weighted average interest rate on the second issuance of bills amounted to about 22.449%, up from the previous highest interest rate of 22.39% recorded last week.